Competition Currents October 2020: Asia
On Sept. 11, 2020, China’s State Administration for Market Regulation (SAMR) published the Anti-Monopoly Compliance Guidelines for Business Operators (the Guidelines). The Guidelines are intended to provide a set of best practices that businesses may adopt in establishing antitrust compliance management systems, lower risk of non-compliance, and increase awareness of relevant laws. The Guidelines are intended to provide “general guidance,” and are not mandatory.
The Guidelines provide key areas of consideration which include:
Tone from the Top: Senior officers of a business are encouraged to make and fulfill clear and open antitrust compliance commitments.
Antitrust Law Compliance Function: Businesses having the ability to do so are encouraged to establish antitrust compliance management departments or incorporate antitrust compliance management into their existing compliance management systems. Such departments should have sufficient independence and authority to effectively implement antitrust compliance efforts. In addition, it is recommended that such departments proactively organize and conduct internal antitrust compliance audits to identify risk (and implement mitigation measures when issues are discovered), formulate internal compliance policies, compile compliance reports, and coordinate both internally and externally to respond to antitrust investigations when they arise.
Risk Identification and Assessment: Businesses are encouraged to proactively identify antitrust compliance risks based on the characteristics of the business itself and market/industry characteristics, possibility of occurrence and severity of consequences.
Training: Businesses are encouraged to invest resources in compliance training for employees.
The Guidelines are notably silent, however, on whether a business’ compliance efforts will be credited in the calculation of fines at the conclusion of a governmental investigation. Further clarification on this point would further incentivize businesses to implement robust antitrust compliance management systems.
A. The JFTC performs on-site inspection to a distributor of Wilson Sporting Goods.
According to the news release on Sept. 10, AMER SPORTS JAPAN, INC. (AMER), the designated distributor in Japan of Wilson Sporting Goods, is under investigation by the JFTC – including on-site inspection – for violation of Antimonopoly Act. AMER is reported to have pressured other distributors outside of Japan into not trading with parallel importers in Japan, and pressured wholesalers into not selling goods to distributors that deal with parallel importers. The JFTC is investigating AMER’s reported actions impeding parallel import as preventing fair competition.